Microsoft Layoffs Would Be the Fourth-Biggest in Tech’s Modern History

Moneybox
A blog about business and economics.
July 18 2014 11:14 AM

Microsoft Layoffs Would Be the Fourth-Biggest in Tech’s Modern History

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Microsoft CEO Satya Nadella.

On Thursday, Microsoft announced its biggest round of layoffs in its history. As many as 18,000 employees—or up to 14 percent of Microsoft's workforce—are on the line to lose their jobs. More than 12,000 of those cuts are expected to come from the Nokia mobile phone business, an unpopular investment made by former chief executive Steve Ballmer last year. It's the first major step by current CEO Satya Nadella toward turning the lagging tech corporation around.

Setting aside the cuts being made to Nokia staff, some 5,500 people are expected to lose their jobs from Microsoft. That's roughly on par with the 5,800 employees that Microsoft axed in the wake of the financial crisis. The Wall Street Journal reports that some were even hoping for a more drastic move from Nadella in reshaping the company's sprawling operations. That said, 18,000 is a lot—especially in the technology industry. According to data from outplacement firm Challenger, Gray & Christmas, Microsoft's layoff announcement is the fourth-biggest* at a U.S.-based firm since it began tracking such things in 1989:

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  1. IBM: 60,000 employees (July 1993)
  2. Hewlett-Packard: 27,000 employees (May 2012)
  3. Hewlett-Packard: 24,600 employees (September 2008)
  4. Microsoft: 18,000 employees (July 2014)

Fifth on that list is Hewlett-Packard again, which announced that it would cut somewhere between 11,000 and 16,000 employees this May. When you add in all industries, Microsoft's cuts aren't all that bad—dwarfed by reductions implemented at banks, automakers, and in the U.S. Postal Service. But for a tech industry not accustomed to mass layoffs (except at Hewlett-Packard, it would seem) trimming 18,000 employees is a significant step.

*Correction, July 18, 2014: This post originally misstated that Microsoft's layoffs would be the fourth-biggest ever in tech. It would be the fourth-largest at a U.S.-based tech firm since 1989, the first year Challenger, Gray & Christmas began collecting data.

Alison Griswold is a Slate staff writer covering business and economics.

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